Nokia’s Chennai Plant had stopped functioning in November due to ongoing Tax issues in India and also because of Microsoft refusing to use Chennai plat for production of its phones. Microsoft decided to kill Nokia X, Asha and Nokia Feature Phones as part of its major restructuring post Nokia-Microsoft deal closure. It subsequently decided to terminate the service agreement signed earlier at the time of deal-closure between Nokia and Microsoft. This service agreement envisaged Microsoft continuing with orders for its low-end handsets to be manufactured by new Nokia, as the plant was not transferred to Microsoft, due to asset-freeze imposed by Supreme court over tax-issues.
Now, with the regime change in India, things are looking a bit different and relatively favorable for manufacturers. The new government to push its “Make in India” campaign to market India as a manufacturing hub. Still, bit surprisingly India’s PM Narendra Modi has indicated that the Nokia Chennai plant may soon restart production.
“Your concern is right. 25000 people were rendered jobless there,” Modi said in Rajya Sabha while responding to the issue highlighted by CPI(M) member Sitaram Yechury about the closure of the Nokia plant.
The Prime Minister, while replying to a debate on the Motion of Thanks to the President’s Address, said the plant had to shut down because of actions of the previous UPA government and not because of the present government.
“Let me assure you. We have started efforts in this direction (to restart the unit). The result of this effort will be that in the coming days, Nokia plant should start functioning again and people will get employment,” Modi said.
This is not clear however, as what Nokia will manufacture in the Chennai plant, given Microsoft has already terminated the service agreement for Phones and Nokia is now using ODMs like Foxconn for its branded devices like Nokia N1.
